UBL

Faces Margin Squeeze Despite Volume Growth

Performance Snapshot Revenue (FY26): ₹1,746.3 crore, down 10% YoY (₹1,940.8 crore in FY25). Profit (FY26): ₹413.4 crore, down 6.6% YoY. Q4FY26 Revenue: Flat at ₹440 crore vs ₹442.7 crore YoY. Q4FY26 Profit: ₹101.8 crore, up from ₹97.7 crore YoY. Volumes: +3% for FY26; +4% in Q4. Premium volumes surged 21%. Cost Pressures Packaging inflation: Glass bottles and aluminium cans up sharply. Aluminium cans: +20–25%, supply shortages in India. Glass bottles: Exposed to fuel-linked inflation, premiumization adds demand. Logistics & sourcing: Disruptions tied to West Asia war. Other pressures: Raw materials, labour code changes, export weakness. Estimated impact: ₹400–500 crore cost burden expected through Q2FY27. Analyst Commentary Abneesh Roy (Nuvama): Revenue miss due to higher mix of contract brewing (accounting impact). Gross margins hit by Iran crisis driving bottling costs higher. Cost pressures to persist in Q1–Q2FY27. Premiumization challenge: Requires more glass bottles, adding cost strain. Outlook Demand remains resilient, with strong premium growth. Seasonality looks favourable, but packaging cost and availability are key risks. Margins likely to stay under pressure until cost inflation eases. Stock sentiment cautious given weaker-than-expected FY26 results.